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Senator Rose Conway-Walsh urges Minister Naughten to progress public banking model

1 June, 2018 - by Rose Conway-Walsh

New services such as public banking should be explored as options for the future of the Post Office network rather than relying on pillar banks according to Mayo Senator Rose Conway-Walsh.

Senator Conway-Walsh was speaking during a Seanad debate on the possibility of piloting a community banking system through the Post Office Network.

“One of the things that have disappeared from the pillar banks, especially in rural Ireland is that very relationship between a bank manager and the customers. In many rural branches you can no longer deal in cash, collect foreign currency or even set up an appointment with a member of staff.

"The recent tracker mortgage scandal and the treatment of customers by the pillar banks has shown a complete breakdown in the traditional banking model. As a member of the Finance Committee, I am firmly of the opinion that nothing has changed in terms of the attitude of the banks involved.

“The Post Office, which has a far greater presence in local communities compared to the pillar banks, could help re-establish the relationship between borrower and lender.

"The time is right to examine ways of providing a new type of banking as well as helping to ensure the viability of the Post Office Network.

"Public banking is not solely focused on commercial lending and on returns to its shareholders. It can play a huge role in lending to SMEs which are still a major employer in rural Ireland. In Ireland though, 90% of lending to SMEs is controlled by 2 banks.

"There is even scope for lending to local authorities at a far more competitive rate of interest. At the moment, many councils are paying millions in high interest fees to the pillar banks.

"Germany, which is only one example, has had a successful public banking sector which has served communities for over 200 years. I want to commend the work of Noel Kinihan and Rural Link for keeping the issue of public banking and the possible models applicable to Ireland, on the political agenda for many years.

"Minister Naughten stated in the Seanad that he does not want to see any compulsory closures of Post Offices. If he is serious about this he should ask his cabinet colleagues to speedily publish the Government’s report, as set out in the Programme for Government, into the viability of a community banking sector in Ireland, as a first step to that end."

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